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RFI, RFP & RFQ Meaning & Process

Electronic RFI, RFP and RFQ also known under the umbrella: RFx software. eRFx is used to gather both qualitative and quantitative information from supplier in one online platform. The supplier evaluation process is made easier as all information is gathered in one place, and one single file can be extracted containing all information.

eRFx Definition: Electronic Request for Information, Request for Quotation & Request for Proposal

"eRFx is an online tool for interchanging qualitative and quantitative information between a buying company and its potential suppliers"

In other words, eRFx is a piece for software, which can be used to share and collect information from suppliers. eRFx will typically substitute an email program as an enabler between buyer and supplier. Examples of an eRFx include a Supplier Pre-qualification (RFI) or a Price Collection (RFQ) or a combination with a Request for Proposal (RFP). 

Manual Tender Process vs. eRFx

The Tradition Tender Process (Manual RFx) vs. Electronic RFI, RFP & RFQ Process (eRFx).

The traditional tendering process is a very manual and time-consuming process. All templates etc. must be created by the buyer and sent via email to the suppliers.

The buyer cannot track the progress of the suppliers' work, and can only sit back and wait for the deadline. This typically entails an extension of the deadline.

The traditional tender evaluation is an extensive task, as you might need to gather multiples files into one overall analysis. This is an error-prone process that ultimately can require re-making of the analysis or in a worst case scenario causes decision making based on incorrect data.

In online eRFx software, you can choose between a set of templates available and track the progress to ensure suppliers are completing the eRFx within the deadline.

The eRFx solution will automatically evaluate incoming information based upon predefined rules. At any time you can also extract the information to one file and do further analysis. 

eRFx Advantages

Cost reduction

The all-in-one online eRFx system makes information sharing much easier between the buying company and the suppliers, as well as internally in the buying company.

External Information Sharing

By utilizing an eRFx tool, it is much easier for the buyer to share information with suppliers, and also for suppliers to share information with the buyer. Instead of sending several emails to the suppliers, the buyer creates the eRFx with all information included and sends a single email with a link to the suppliers. If the information needs updating, the buyer just updates the information in the eRFx and advises the suppliers via the system. As a result, the eRFx link gives the suppliers' access to all relevant update information, at all times. The suppliers avoid having several emails with specifications in several versions, he/she will always see the updated information in the system. The supplier can also easily share information with the buyer, as he/she only has to fill in the questions and/or prices that the buyer has requested.

During an eRFx, there is often a need for the buyer and suppliers to communicate with each other. This communication can also be conducted via the online tool, resulting in all communication becoming accessible in one place. This will provide both parties with transparency and visibility of the Q&A session(s).

Internal information sharing

An online eRFx tool also present the buying company with new possibilities in relation to sharing information internally. The buyer can invite both stakeholders and spectators to the eRFx, providing them with direct access to the eRFx information. The eRFx can also be made available to all other employees, ensuring direct access to supplier information, contact information, project history, supplier files, and documentation etc.

It is possible to save time multiple places in the eRFx process when utilizing an eRFx tool.

The Creation Phase

There are several opportunities to save time in the creation of the eRFx. Instead of creating the questionnaire and bid list manually in Excel or Word, the buyer can easily utilize existing eRFx templates. The buyer will only have to fill in the appropriate information instead of wasting time designing an RFx template etc.

In addition, major time savings can be achieved through the reuse of past eRFx's. Instead of using a standard eRFx template, the buyer can copy a previously conducted eRFx and only edit the text, questions, products, and suppliers before sending it.

The Response Phase

In a traditional RFx, the buyer has no control of the RFx between initiation and the deadline. This often means that the deadline is pushed, as suppliers' send incomplete or wrong information. In an online eRFx, the buyer can monitor the progress of each supplier and perform an ongoing evaluation of the information to ensure that the deadline is kept.

The Evaluation Phase

There are also major time savings available in the evaluation phase, as the eRFx tool makes an automatic evaluation of the incoming information. All-in-one evaluation reports can be extracted to Excel, PDF etc., resulting in the buyer having an excellent starting point for his/her analysis. From the creation phase, the buyer will also save time in the evaluation phase since he/she is able to control the inflow of information, making it impossible for suppliers to upload irrelevant information.

Structured, Transparent and Uniform Process

By utilizing an online eRFx tool the buying company will automatically achieve a more structured and uniform corporate way of creating and initiating tenders. All buyers will use the same set of eRFx templates, the same questionnaire, and bid list layout. This will increase transparency across the company as everyone will be familiar with the eRFx layout, and thus able to understand other people's eRFxs' and also make audits easier. Finally, usage of the online eRFx tool will result in the buyers' decisions being formed from the same Excel and PDF reports. Thereby ensuring a more uniform evaluation process across the buyers'.

Professional Tendering Process

By utilizing an online eRFx tool, the buying company will also appear more professional towards the participating suppliers, as the layout of the eRFx becomes independent of the buyer. In the traditional approach, suppliers communicating with different buyers within the same company would be receiving RFxs' with completely different layouts. In the eRFx approach, suppliers will experience a uniform and coherent process for completing eRFxs' for the entire buying company, which also eases their task.

Independent Of Individual Employees

It is not possible to permanently delete information in the eRx tool which means that users will always be able to access their colleagues information. This also goes for employees that might have left the company several years ago.

This means that it becomes easy for a buyer to e.g. confirm a supplier quote contained in an event conducted by a former colleague.

All Information Accessible In The Future

Since the information is never deleted, it will also always be accessible in the future. This will apply to all information in the event. Hence, messages are also stored which also lessens the realibility on saved emails.

This will also make audits easier, as all information will be stored in one place and everything will be traced in the eRFx system's log book.

How RFI, RFP and RFQ Fits in the Traditional Sourcing Process

The usage of eRFx technology tool does not require transitioning to a completely new Sourcing process. The eRFx system is just a more efficient way of completing the same steps in the traditional Sourcing process. eRFx is predominantly used in the pre-qualification steps "Pre-select potential suppliers" and "Select qualified suppliers", but can also be used in the internal analysis performed in the step "Conduct category analysis".

eAuctions, on the contrary, is most often used in the step "Conduct negotiations" as an alternative way of conducting the final supplier negotiations.